There’s no need to fear change and we certainly shouldn’t be subscribing to confrontation
Our recent Leicestershire federation seminar on ‘Securing your pharmacy future’ attracted over 50 independent contractors from as far afield as Leeds and Kent. With an agenda covering key business survival strategy, the biggest concern on the mind of every pharmacy owner was the financial viability of their business.
Keynote speakers included business advisors from pharmacy banker Santander and leading specialist pharmacy agent Christie & Co. Both institutions insist our sector is still buoyant, but they did warn about the impact of eroding pre-tax profitability on pharmacy valuations. The demand for pharmacy purchase still outweighs supply and there’s good reason to think this is due, in part, to the many young entrants to the market that believe ownership is the only way to secure a well-paid role.
Accountants and tax specialists Pillbox Capital highlighted current tax implications for those considering retirement as an exit strategy. As I’ve discussed in previous issues, the potentially crippling impact of inheritance tax needs to be carefully considered, with smart planning put in place to mitigate against the risks.
The planning doesn’t end there though. I couldn’t help but notice the large number of pharmacists that were torn over any retirement decision. We all wonder what we would do for the rest of our life. After 30 years devoted to running your own business, it’s extremely difficult to embrace another existence when you’ve known nothing else.
For those of us wanting to stay and fight another day, it’s important to identify the best investments to keep our assets safe. It’s the right time to recognise that improved efficiencies can be achieved by investment in technology and by creating alternative income streams.
Robot technology, such as that demonstrated at the seminar by Willach, and the integration of hub-and-spoke technology is one way forward. With the imminent total integration of EPS, UK systems could become just as efficient as the remotely-controlled dispensing factories already operating in North America and closer to home in Holland.
Contrary to popular opinion, financial institutions will consider investment in pharmacy as long as it secures future business and, more importantly, on condition that there’s adequate equity in the business. For those owners wanting to take investment to a new level, there is still bank appetite to support pharmacies wanting to purchase other independents as a way of diversifying risk. However, this possibility is very much on a case-by-case basis.
NPA board member and PSNC representative Umesh Patel outlined to delegates the joint strategy and associated fighting fund created to oppose government funding cuts proposed for later this year.
I for one am not convinced that our representative bodies are either confident or current in their approach, which involves little more than lobbying patients, MPs and any other decision makers.
I’m hearing overtones of Arthur Scargill, Margaret Thatcher and the miners’ strike of the 1980s.
In response to a suggestion from one independent that his multiple colleagues are lacking in their support and engagement with local lobbying activities, Umesh Patel was keen to point out on behalf of the NPA that all categories of the community pharmacy sector had signed up to the campaign, adding: “I will personally make sure every pharmacy contractor in your area puts up posters and get the stickers on their cars”.
I have to agree with the federation member who suggested our profession might be better served by the NPA focusing on finding solutions that allow us more involvement in determining our own future; sensible solutions that could be submitted to the government as counter-proposals.
At the end of the day, the burgeoning question will be, should we fight or should we talk? Fiscal restraints are inevitable in the current climate, so how can we use dialogue effectively to modernise the entire community pharmacy sector?
Community pharmacy needs to re-invent itself as petrol stations have done – from places where we once only stopped for fuel but now buy anything from Costa coffee to CDs. We need to capitalise on our goodwill, or goldmine, as one speaker suggested. We can’t allow this hugely valuable asset to be lost to draconian austerity measures that will be imposed unless we counter the government with constructive, effective and realistic proposals.
We need to create a solid foundation on which to build our future. The smart approach is to ensure the entire nation understands exactly what we do already and how much more we’re capable of delivering in the future.
The take-home message from the Leicestershire independent federation’s seminar is to stay focused and don’t make any rash decisions. The market will return to a new status quo once the challenge to government cuts has happened and the new funding package is in place.
The pharmacy sector will inevitably evolve over the next 12 months, but there’s no need to fear change and we certainly shouldn’t be subscribing to confrontation.
We must behave as the highly skilled professionals we are and prove we’re capable of sensible and legitimate negotiation that will sustain easily accessible primary healthcare in the heart of each and every community.
Times may seem uncertain, but if independents know what we want they will appear less so.